The Expectations Hypothesis Assumes Each of the Following, Except

question 115

Multiple Choice

The expectations hypothesis assumes each of the following, except:

• A) long-term bond rates are equal to the average of current and expected future short-term interest rates.
• B) bonds of different maturities are not perfect substitutes.
• C) bonds of different maturities have the same risk characteristics.
• D) bonds of different maturities are perfect substitutes.

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Definitions:

Unless

A conjunction used to indicate that a particular situation would occur only if there's an exception or condition not met.

Just In Case

A phrase used to describe a precautionary action taken to prepare for a possible future event or circumstance.

Conditional

A logical statement that has an if-then structure, implying that if one condition is met, then another condition follows.

Negation

In logic, the operation that takes a proposition to its opposite in truth value.